Pass The 65: A PLAIN ENGLISH EXPLANATION TO HELP YOU PASS THE SERIES 65 EXAM - UPDATED FOR 2017

Paying off a debt is sometimes referred to as a debt being “defeased.” Therefore, the exam could refer to the refunding bonds as being issue in order to “defease” the prior issue of outstanding bonds. In other chapter when we mention custodial accounts for minors, we’ll mention that gifts to the account are “irrevocable and indefeasible.” That mean

If you sell your bond, you obviously don’t care about the next investor’s yield. But, when this investor's bond matures, how much does she get back from the issuer? Only $1,000. So, she put down $1,200 and will only get back $1,000 at maturity. Pretty easy to see why her Yield to Maturity (YTM) goes down below both the nominal and current yields.

For various reasons, the corporation might decide to buy back some of those shares that are out in the secondary market. These shares, which were issued but repurchased, are called treasury stock. Treasury stock has no voting rights and pays no dividends.

They then created an account that is separate from the general account and, believe it or not, decided to name it the separate account. It’s really a mutual fund family that offers tax deferral, but we don’t call it a mutual fund, even though it’s also covered by and registered under the same Investment Company Act of 1940.

The IRS allows many small businesses to use the cash method, but certain entities are required to use the accrual method. C-Corporations with annual gross receipts > $5 million, for example, are required to use the accrual method, as are partnerships that have a C-Corporation as a partner and receive > $5 million in annual gross receipts.

when the stock moves your way, you can end up using borrowed money in order to borrow more money. Also note that when dividends, interest, or capital gains distributions from mutual funds come into the account, that income is applied to/pays down the debit balance. Therefore, SMA is affected by such income being applied to the debit.

Step one—remember that if you think a stock is going nowhere, you do not want to buy an option, period.

even though the SEC makes issuers jump through all kinds of hoops, once it’s all done, the SEC pretty much washes its hands of the whole affair. The SEC doesn’t approve or disapprove of the security. They don’t guarantee accuracy or adequacy of the information provided by the issuer and its underwriters. In other words, if this whole thing goes hor

Commissions are charged by broker-dealers when you buy and when you sell securities. So, when you buy shares of GE, you add the commission to the cost basis, and when you sell those shares of GE, you subtract the commission from your proceeds.